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Sunday, January 26, 2020

Punjab Assembly Session: After development tax, state passes Bill to impose social security surcharge

Taxes shall not be levied immediately but legislation allows government to impose these anytime after Governor gives his assent to the Bill and it becomes an Act.

Written by Kanchan Vasdev | Chandigarh | Published: March 29, 2018 2:00:17 am
Manpreet gets personal as he attacks Badals, Majithia in House Finance Minister Manpreet Singh Badal during the Assembly session. (Express photo)

Residents of Punjab will need to brace to pay more for electricity, liquor, registration of vehicles, road tax, diesel and petrol. Four days after the Punjab government levied development tax of Rs 200 per month on the income tax payers in the state, the Assembly on Wednesday passed The Punjab Social Security Bill, 2018, that provides for imposing five more taxes.

The fund collected through these taxes, which shall be called Punjab Social Security Fund (PSSF), will be utilised to fulfil social security commitments of the government, the Bill mentions. The CM will head the Trust that will collect this fund.

Taxes shall not be levied immediately but legislation allows government to impose these anytime after Governor gives his assent to the Bill and it becomes an Act.

The Bill provides for levying of five taxes called Social Security Surcharge. A surcharge of not exceeding Rs 2 per litre of sale of petrol or diesel, not more than one per cent of value of vehicles registered in the state, up to 10 per cent on transport vehicles, surcharge of five per cent of monthly electricity bill and not more than 10 per cent of excise duty and licence fee on liquor and liquor vends.

In case of surcharge on electricity, the minimum liability on the consumer shall be a minimum Rs 25 and a maximum of Rs. 10,000 per month.

Bill was passed by voice vote, in the absence of SAD-BJP members who had staged a walkout. AAP leader HS Phoolka objected, accusing the government of “slipping” the Bill at the last minute without listing it in the legislative business.

Finance Minister Manpreet Singh Badal, while proposing the Bill in the Assembly, said the PSSF would be utilised for paying pensions to senior citizens, widows, physically challenged, destitute women, post matric scholarships, health and accident insurance, shagun scheme, financial assistance to acid attack victims, and unemployment allowance. He said the government was not imposing the taxes right away. “We are just bringing in the legislation.”

In his budget speech, the FM had proposed a revenue of Rs 1500 crore in the next fiscal from Development Tax and Social Security Fund.

The fund may also receive contributions from corporates, individuals, partnership firms or companies under the companies Act, 2013. The controlling trust would have a governing body comprising the CM, FM, Social Security Minister, Welfare of Scheduled Castes and Backward Classes Minister as ex-officio members. Three persons of eminence would also be nominated an finance secretary would be the ex-officio member-secretary of trust.

Development Tax

Vidhan Sabha also passed The Punjab State Development Tax Bill, 2018, that provides for levying a Development Tax of Rs 200 per month on Income Tax payers in the state.

The Bill was proposed by the Finance Minister and would be sent to the Governor for his assent. The tax would extend to the whole state, and offices of government of Punjab, and offices of anybody, which is owned or controlled by the state of Punjab situated in the capital of Punjab.

It would be deducted from a government servant receiving pay from the revenues of Centre, or any state government or the railway fund, government employee of Punjab even though his office is situated outside Punjab, and any other person who is engaged in any profession, trade, employment in the state, or a sole proprietor, a Hindu Undivided family, a partnership firm, a society, a trust, a club, an institution, an association, a local authority, a department.

The tax shall be deducted by the employer from employee’s salary or wages. If any employer fails to deduct the tax, or to deposit it with the government he would be liable to pay a penal interest of 2 per cent.

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